Making sense of property taxes (Dormont, Homestead: sales, how much, house)

[JoshM25]

My wife and I have been house hunting for about a month now and we think we've finally found the one. It's in Dormont on Biltmore avenue and it's great. We have an offer in and we're waiting to hear back.

What I can't seem to make sense of is the property tax situation. Maybe someone can clue me in. I know what a millage is and can find basic info on the county site. But my specific questions:

-- Are taxes calculated base on assessed or full market value? The FMV of this house is $72,000, but the assessed is 15k lower at $57,000.

-- The MLS listing states that the 2009 taxes were $2,608. Where are they getting this number? It doesn't seem to compute with the millage rates. Are they changing or did they change?

-- What's up with the homestead exemption? Does this save me money on taxes? If so, do I have to re-apply even if the previous homeowners already did?

-- Will the property be re-assessed once if I buy it? I've been told various stories on this. As I said, it's in Dormont.

Thanks for the help and sorry for all the questions. It just helps to get specific info from real people sometimes!

~Josh

[Hopes]

Originally Posted by JoshM25

-- Are taxes calculated base on assessed or full market value? The FMV of this house is $72,000, but the assessed is 15k lower at $57,000.

Taxes are calculated on the assessed value.

Originally Posted by JoshM25

-- -- The MLS listing states that the 2009 taxes were $2,608. Where are they getting this number? It doesn't seem to compute with the millage rates. Are they changing or did they change?

The county millage rate doesn't include the school district tax.

Look up the property on the Allegheny County website to see how much county tax was paid in 2009.

Allegheny County Assessment

Originally Posted by JoshM25

-- -- What's up with the homestead exemption? Does this save me money on taxes? If so, do I have to re-apply even if the previous homeowners already did?

Allegheny County Property Assessment FAQ - How Can I Reduce My Property Tax Bill?

Originally Posted by JoshM25

-- -- Will the property be re-assessed once if I buy it? I've been told various stories on this. As I said, it's in Dormont.

Not immediately. However, you should be prepared for the assessment value to change at some point in the future. This keeps going back and forth in court. Eventually, taxes will go up someday.

[JoshM25]

Taxes are calculated on the assessed value.

Not doubting this information, in fact I'm excited about it. But I've been told by numerous people that the FMV on the county website it used to calculate taxes. Maybe the fmv is only used for the school district?

The county millage rate doesn't include the school district tax.

Look up the property on the Allegheny County website to see how much county tax was paid in 2009.

I'm aware that there are three types: muni, SD and county. According to the county site, the county taxes paid were $261 last year. Based on the 4.69 millage, this makes the taxable value around $56,000, which is close to the assessed value of 57k. Not trying to split hairs, but is this because the homeowner has the homestead exemption? This refers to the point above, but is the assessed value used only to calculate county taxes?

Based on Dormont's 40 millage. This house should have total taxes (all three) of $2,280 if the taxable amount is indeed the assessed value. My realtor tells me the amount should be $2,880, which is based off of the 72k full market value.

[Hopes]

Homestead exemption doesn't do anything NOW. It's protecting the rights to decreased taxes in the future if there is ever an opportunity.

It's possible that the county is basing it on the assessed value and the school district is basing it off the sale price. I think that's very likely.

[Copanut]

I believe your Realtor is correct and probably discounted the tax a few hundred since there is a discount if you pay early.

Chances are your taxes won't go up if you pay around 125 for the house in question, if it's the one on Biltmore I think it is. But the school district may come calling, they have a history of going after new purchases and having the value raised. So, you could find your school taxes being raised from 2887 to 5012. And Dormont Boro, at 14 mils has one of the highest rates in the county.

I like the area, lived there for 10 years, hate the taxes.

Good luck with Mr. Kelly.

[BrianTH]

Right now they should be using the 2002 Base Year system, which means the assessed value is supposed to equal the market value as of 2002. This system has been declared unconstitutional for Allegheny County and we are supposedly going to be reassessed by 2012. To further complicate things, Pennsylvania has an anti-windfall law, which basically means if after a reassessment the property tax base in a jurisdiction goes up, the property tax rate will be automatically adjusted down to keep revenue the same.

[JoshM25]

Originally Posted by Copanut

I believe your Realtor is correct and probably discounted the tax a few hundred since there is a discount if you pay early.

Chances are your taxes won't go up if you pay around 125 for the house in question, if it's the one on Biltmore I think it is. But the school district may come calling, they have a history of going after new purchases and having the value raised. So, you could find your school taxes being raised from 2887 to 5012. And Dormont Boro, at 14 mils has one of the highest rates in the county.

I like the area, lived there for 10 years, hate the taxes.

Good luck with Mr. Kelly.

Thanks for the info. So is Hopes wrong?

It is indeed the one you're referring to. I'm wondering though how you are coming up with 2887 and 5012. At 14 mils, the taxes for the SD would be 1750 if you go off 125k taxable value, which is the worst case scenario. My total property taxes would be currently 2887, but that's all three property taxes. Kind of confused here.

Do I need to know anything about Mr. Kelly? Is he hard to deal with or something?

Thanks!

[Copanut]

Millage rate for the SD is 21.31, the boro is 14. Worst case scenario is Keystone Oaks comes after you for an increase based on your sales price. Probably won't happen, but it does out here in the North. How the SD has that much power is beyond me. If you take away school taxes this area is even more affordable.

Mr. Kelly is a very good guy, 3rd generation Realtor.

good luck.

[groar]

Originally Posted by Hopes

Homestead exemption doesn't do anything NOW. It's protecting the rights to decreased taxes in the future if there is ever an opportunity.

that's incorrect. the homestead exemption does reduce the value that your house is taxed at by the county by $15k. from the link you posted:

Beginning with tax year 2004, the initial $15,000 in assessed value of each owner occupied residential property, and certain farmstead properties, within Allegheny County can be exempted from county property taxes.

the full market value is the actual value that the property is assessed at, and the county assessed value is that value minus the homestead exemption. the cav is what the county taxes you on. if you weren't going to occupy the house as your primary residence, the county assessed value would go up to the fmv but since you are, it will stay the same. you will have to apply for the exemption but it's really not a big deal, just a simple form to fill out. i think the county even sends it to you in the mail after the deed transfers to you. or you may just have to get it in by next march, i forget how it worked when we bought our house.

unfortunately, the exemption doesn't apply to school district taxes, which are usually the bulk of your property taxes. nor does it cover city taxes. both of those are based on the fmv. nothing is based on the sale price except possibly any future reassessment.

[Bong477]

How does FMV or assessed value figure into what the actual value of a house is? Meaning if the website says my house FMV is say... 140k does that have any meaning for what it should be able to sell for? I'm not sure I understand where these numbers come from...